residential-rate-design-presentation-20210519.pdf - BC Hydro

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Residential Rate Design

Engagement Session

May 19, 2021

3

4

Approximate

Time

Item Presenter

1:00 – 1:10pm Virtual Workshop Procedures Host

1:10 – 1:20pm Opening RemarksKeith Anderson

Vice President, Customer Service

1:20 – 1:40pm Background and ContextAnthea Jubb

Senior Regulatory Manager, Tariffs

1:40 – 2:00pm Jurisdiction ReviewAnthea Jubb


2:00 – 2:30pm BC Hydro Residential CustomersShiau-Ching Chou

Rates and Program Manager

2:30 – 2:55 pm Rate Design Concepts and PricingRob Zeni

Senior Regulatory Specialist

2:55 – 3:00 pm Next Steps and Closing RemarksChris Sandve

Chief Regulatory Officer

Workshop Agenda

Welcome

Keith Anderson

Vice President, Customer Service

Today’s Objectives

▪ Provide information on the rate concepts we’re exploring

around residential rate design.

▪ Collect feedback to help shape our future residential rate

designs and inform our application to the BC Utilities

Commission.

BC Hydro’s Mandate

▪ BC Hydro is a Crown corporation. Our mission is to

safely provide our customers with reliable, affordable

and clean electricity throughout the province

▪ BC Hydro supports electrification, including CleanBC

goals

▪ BC Hydro provides its customers with affordable, fair

and stable rates.

▪ We strive for economic efficiency in our rate designs

to reduce the total overall cost of electricity and

maximize the overall benefits of the electricity system

What is Rate Design?

8

Revenue Requirements Cost of Service Analysis Rate Design

How much revenue does BC

Hydro need to operate and

serve its customers?

What are pricing, charges, terms

and conditions should be used to

recover costs?

Rate design refers to pricing, charges, terms and conditions of service

What are BC Hydro’s costs

of energy (cents per kWh),

cost of demand (dollars per

kW) and fixed cost per

account (dollars per

account) ?

Why are we reviewing rate designs now?

▪ Changes in customer energy needs and expectations

▪ Changes in climate policy

▪ Changes in BC Hydro’s costs, such as a reduction in the cost

of new energy supply, and the potential need to invest in

transmission and distribution infrastructure.

Phase I

(April-May)

Concepts

Phase II

(Aug-Sept)

Options

Phase III

(Nov-Dec)

Proposal

Engagement Plan for Rate Design

- Online survey

- Stakeholder session (May 19)

- Telephone townhalls

- Additional engagement

- Explore rate options

- Measure support


- Finalize rate proposals


Invite you into the process

Keep you engaged

Demonstrate we listened

10

Background and contextAnthea Jubb


12

▪ Under the Utilities Commission Act, the BC Utilities Commission sets

rates

▪ The current Residential Inclining Block Rate (i.e. residential conservation

rate) design is approved by the BC Utilities Commission as part of Order

No. G-62-20 until March 31, 2022

▪ As directed by the BC Utilities Commission, BC Hydro filed a report on

March 26, 2021 with our progress and plans on residential rate design

▪ In that report, BC Hydro committed to filing a residential rate design

application by February 2022, that will be informed by customer and

stakeholder input

Regulatory Context

13

▪ BC Hydro has changed our residential rate design only three times:

• a declining block energy charge from 1958 to 1994, then

• a flat energy charge from 1995 to 2008, then

• an inclining block energy charge from 2008 to present.

Residential Rate Design History

14

▪ RS1101 Residential Inclining Block Rate, (RIB rate) accounts for 40% of

BC Hydro’s domestic revenue, 94% of residential sector revenue

▪ The 2002 Energy Plan provided policy direction for BC Hydro to

introduce default rate designs with the overriding objective to promote

energy conservation

▪ At that time, BC Hydro was facing an energy supply deficit, and new

sources of energy were expensive

▪ The RIB Rate was implemented in 2008 to achieve energy conservation,

by increasing bills for higher usage customers and decreasing bills for

lower usage customers

Residential Inclining Block (RIB) Rate Background

Residential Inclining Block Rate Design

15

Step 2

Step 1

Rate

Consumption

$0.1410 / kWh

$0.0941 / kWh

($0.2080 / day)

Residential Inclining Block Rate Schedule 1101 =

675 kWh

per month

Step 2 rate was

intended to

reflect BC Hydro’s

Long Run

Marginal Cost of

Energy

Basic Charge

+ Step 1 Energy Charge

+ Step 2 Energy Charge

16

▪ The Residential Inclining Block Rate Design met its objective of achieving

energy conservation

▪ 2013 evaluation verified energy savings from the RIB Rate of up to 200

GWh/year in F2010, equivalent to 1% savings across the Residential Class

▪ A 2017 evaluation verified that by 2016 the RIB rate was no longer

achieving new energy conservation

Residential Inclining Block Rate Performance

Sources: Appendix C-3B of BC Hydro’s 2015 Rate Design Application

Appendix AA of BC Hydro’s F2021-F2022 Revenue Requirements Application

17

▪ 2019 Union of BC Municipalities Resolution B73 to change the two-tier

pricing due to its impact on home heating costs

▪ Letters from customers encouraging rate redesign to support electric

vehicle charging and reduce the cost of electric home heating

Customer and Stakeholder Feedback

18

December 2020 Customer Survey

If Rate Design Meets Customer Needs by Housing Type

Likely to opt-in

for discount

when heat

pump used

All respondents

All respondents

All respondents

Number of respondents

Housing Type

Small singlefamily home

Larger singlefamily home

This email-to-online survey was sent to a random sample of 8,427 residential customers who previously provided consent to be contacted

19

▪ In addition to customer feedback, cost of service and

economics are a foundational input to electric utility rate design

▪ Rate design applications to the BCUC must be justified on a

cost of service and/or economic basis

▪ Aligning rate design with cost of service and economics is

important to BC Hydro because it provides a framework to:

▪ Ensure rates are fair to all customers

▪ Provide economic benefits to ratepayers

▪ Support financial sustainability and recovery of the revenue requirement

Rate Design Costs and Economics

Helps us understand our costs for each customer class

Fully Allocated Cost of Service Study and Rate design

20

▪ These studies estimate how much of our total costs are associated

with energy, demand and customer care

▪ In rate design, the concept of fairness relates to how well pricing

reflect the utility cost of service

▪ Fully allocated cost of service studies help us assess fairness

BC Hydro’s Costs of Service

21

F20 cost of

energy:

3.9 c/kWh

F20 cost of

demand:

219 $/kW-yr

Residential (RIB Rate)

Helps us assess economic efficiency

BC Hydro’s Economic Environment

22

▪ Marginal costs provide an estimate of the cost (or savings) of one

additional unit of output (energy or capacity)

▪ Rate design principles of economic efficiency call for the

customers marginal price to reflect the utility’s marginal costs

▪ Economically efficient rate design should reduce the overall cost of

electricity and maximize the overall benefits of the electricity

system

23

Energy Load Resource Balance in 2008

Source: BC Hydro’s 2008 Long Term Acquisition Plan

When the RIB rate was introduced, BC Hydro was in an energy deficit

• Bars represent existing and committed energy supply resources

• Dashed lines represent the load forecast

• Yellow area represents load forecast uncertainty band

BC Hydro’s Current Load Resource Balance Energy

24

We now expect to be in an energy surplus to about 2030

BC Hydro’s Marginal Cost of Energy

25

Our reference price for energy is 3 to 5 c/kWh

1. Affordability

▪ Measured by bill impacts associated with a rate design

2. Economic Efficiency

▪ Measured by how closely the energy charge reflects our marginal cost

3. Decarbonization

▪ Measured by how much the rate design encourages fuel switching from fossil fuels to

clean electricity

4. Flexibility

▪ Measured by ability to respond to changes in the economic and policy environment and

anticipate the need for greater product and service differentiation in rate design.

BC Hydro’s Rate Design Objectives

26

Feedback form question #1: What measures should we

consider in assessing rate designs against our objectives?

Jurisdictional reviewAnthea Jubb


28

Rate Designs and Benefits

Design Benefits

Flat energy charge plus fixed basic charge• Same energy charge applies for all usage

• Bill, revenue and rate stability

• Flexibility to introduce additional voluntary rates

Declining Block Energy Charge • Lower energy charge applies for usage above a

threshold

• Economic efficiency during energy surplus

• Encourage additional use

Inclining Block Energy Charge• Higher energy charge applies for usage above a

threshold

• Economic efficiency during energy deficit

• Encourage energy conservation

Time varying energy charges• Energy charge varies over the day

• Economic efficiency during capacity deficit

• Shift usage out of peak demand times

Demand charge• Demand charge applies for highest power draw in

the month

• Fair allocation of costs

• Improves utility fixed cost recovery

29

Utility Default Rate Structure Energy Charge Fixed Charge

BC Hydro Residential Inclining Block

Rate (RS 1101/2)

Inclining Block

Step 2 threshold is 675kWh/

month

Approx. $6/month

Hydro Quebec Residential and Farm Rate D Inclining Block Rate

Step 2 threshold is 900

kWh/month

Approx. $12/month

Manitoba Hydro Residential Standard Rate Flat rate Approx. $9/month for

service below 200A, and

$18/month for service

above 200A

Sask Power Residential Rate Flat rate $23/month for urban

accounts, $33/month for

rural accounts

FortisBC Residential Rate Half-way thru 5-year transition from

tiered to flat rate.

Currently stepped rate with

threshold of 800 kWh/month

Approx. $19/month

Comparable Canadian Utility Residential Rate Designs

Information as of April 2021

$6

$12

$9

$18$19

$23

$33

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

BCH Hydro Quebec Hydro Manitoba(<200A)

Hydro Manitoba(>200A)

Fortis BC Sask Power(urban)

Sask Power(rural)

Basic Charge per month

(<200A) (>200A)

Comparable Canadian Utility Basic Charge Comparison


31

Utility Default Rate Structure Energy Charge Fixed Charge

Pacific Power

Residential Inclining Block Rate

Step 2 threshold is 1000 kWh/month $9.50/month

Portland General

Electric

Basic service for residential

and small business customers

Inclining Block Rate

Step 2 threshold is 1000 kWh/month$11/month

Idaho Power

Company

Residential Service Standard

Plan

Inclining Block Rate

Step 2 threshold is 800 kWh/month

Step 3 threshold is 2000 kWh/month $5/month

Residential Rate Designs in the

US Pacific Northwest


.

US Example of Segmentation: Arizona Power Residential Service

32

Plan Basic Charge

($/month)

Energy Charge Demand Charge Availability

Time of Use

choice

13 Seasonal and Daily Time of Use

Peak pricing up to 24 c/kWh

N/A • Higher usage

accounts, e.g.

larger single family

homes (> 999

kWh/month)

• Accounts with

customer side

solar generation

Time of Use Plus 13 Seasonal and Daily Time of Use

Peak pricing up to 13 c/kWh

8 $kW

Time of Use Max 13 Seasonal and Daily Time of Use

Peak Pricing up to 9 c/KWh

17 $/kW

Premier Choice 15 Flat energy Charge of 12.4 c/kWh N/A 601-999 kWh/month,

e.g. smaller single

family homes

Lite Choice 10 Flat energy Charge of 11.7 c/kWh N/A < 600 kWh per month,

e.g. apartments


US Example of Providing Rate Options:Georgia Power Residential Service

33

Plan Description Availability

Flat Bill

Rate Schedule

Flat-5

Fixed monthly bill = [Expected Monthly kWh * (Energy Charges) * (1+

Risk Adder %)] + Basic Service Charge

Risk adder <=10 %

No true up at end of years

Fixed bill reset annually

Individually metered

account with more

than 12 months of

history and a monthly

flat bill > 25 $/month

Plug in EV Time of use pricing with super off peak price of 1 c/kWh, off peak price of

7 ck/kWh and on-peak price of 20 c/kWh

Basic charge of $12/month

Any residential

service customer

Pre pay No deposit, credit check or reconnection fees


Seasonal energy charge: 7.7 c/kWh summer, 5.4 c/kWh winter

Any residential

service customer

Residential

Service

Winter season: three step declining block energy charge

Summer season: three step inclining block energy charge


Any residential

service customer


US Example of End Use Rate: Southern California Edison

34

Plan Description Availability

Time of Use

Rate D-Prime

Seasonal and Daily time of use energy charge

with lowest price after 9 pm

Fixed monthly charge of $12

Offers the lowest energy charges of any of this

utility’s four residential rate plans

Intended to encourage decarbonization

through electrification

Exclusively for high usage

accounts with one or more:

• plug in electric vehicle,

• electric heat pump for space

conditioning and water heating,

• residential battery

Requires verification of ownership

or lease of the above


Examples of Time Varying Rates

35

Jurisdiction Type of Rate Deployment

Arizona, US (Arizona Public Service) Time-of-day Opt-in

Arizona, US (Arizona Public Service) Three-part rate Opt-in

California, US (PG&E, SCE, SDG&E) Time-of-day Default (2020)

Colorado, US (Fort Collins) Time-of-day Mandatory

Illinois, US (ComEd, Ameren Power Illinois) Real-time pricing Opt-in

Michigan, US (Consumers Energy) Time-of-day Default (2021)

Information as of fall 2020

Examples of Time Varying Rates -

Continued

36

Jurisdiction Type of Rate Deployment

Michigan, US (Consumers Energy) Time-of-day Default (2021)

Oklahoma, US (OGE) Variable peak pricing Opt-in

Ontario, Canada Time-of-day Default

Québec, Canada (Hydro-Québec)Peak-time rebate & Critical

peak pricing Opt-in

France Time-of-day Opt-in

Italy Time-of-day Default

Information as of fall 2020

Residential CustomersShiau-Ching Chou

Rates & Program Manager

Demographic Analysis

We’ve taken a customer centric view

▪ Use our customer data to inform our rate design process

▪ This information is helpful to:

• Understand the unique needs of our customers

• Measure our customer and business objectives

• Understand how rate options impact customer segments

differently

3

9

BC Hydro Territory

Rate Zone# of

Customers

Zone I ~1.9M

Zone IB ~500

Zone II ~5,000

Rate

ScheduleDescription

Number of

Customers

% of

CustomersRevenue

1101 Zone I: Residential Service 1,856,165 98.56% $2,132M

1121 Zone I: Multiple Residential Service 1,251 0.07% $10M

1105 Zone I: Residential Service – Dual Fuel (closed) 5,646 0.30% $5M

1151 Zone I: Exempt Residential Service 14,581 0.77% $55M

1161 Zone I: Multiple Exempt Residential Service 14 0.00% $119K

1151 Zone IB: Residential Service 472 0.03% $850K

1107 Zone II: Residential Service 5,072 0.27% $7M

1127 Zone II: Multiple Residential Service 4 0.00% $15K

Residential Rates

Residential Inclining Block rate customer characteristics

41

59%

21%12% 8%

0%

20%

40%

60%

80%

LM VI SI NRegion

Regional Distribution

42%

58%

Space Heating Type

Electric

Non-Electric

33%

44%

23%

Step 1 vs Step 2 Consumption

Never in Step 2

Sometimes in Step 2

Always in Step 2

0

100,000

200,000

300,000

400,000

500,000

600,000

Nu

mb

er o

f C

ust

om

ers

kWh/year

Annual Consumption by Housing Type

OTHER

MOBILE HOME

ROW HOUSE

APARTMENT

HOUSE / DUPLEX

MFD. HOME

Customer Data

Number of customers ~1.9M

Avg monthly

consumption836kWh

Avg monthly bill $99

Total consumption 18,891GWh

Total revenue $2.25B

$25

$54

$93$154

$254

$400 $752 $2,117

Average monthly RIB bills

LM: Lower Mainland VI: Vancouver Island SI: South Interior N: North

17%

38%

45%

23%

41%

37%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

<2 2-10 >10

Years

Account Duration Distribution

Segment Population

10%

38%

51%

23%

39% 38%

0%

10%

20%

30%

40%

50%

60%

1 person 2 people 3+ people

Household Size Distribution

Segment Population

2.2% 2.8%

0.0%

1.0%

2.0%

3.0%

Vacancy Rate

Segment Population

11%

34%

28%21%

4% 1% 0.2% 0.2%

25%30%

21%18%

5% 1% 0.3% 0.2%

0%

20%

40%

Annual Consumption Distribution (kWh)

Segment

59%

14% 17%11%

60%

21%12% 7%

0%

20%

40%

60%

80%

LM VI SI N


Segment Population

Non-Electrically Heated House/Duplex Customers

Monthly kWh

Median: 716

(442 – 1,123)

7%21%

93% 79%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Segment Population

Own/Rent Distribution

Renter Owner

Monthly Bill

Median: $78

($48 - $134)

Segment Size

~720k customers

40% of population

27%

44%

29%

Step 1 vs. Step 2

Never in Step 2

Sometimes in Step 2

Always in Step 2

11%

21%

89%79%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Segment Population


Renter Owner

4%

12%

21%

39%

17%

5%1% 0%

25%30%

21%18%

5%

1% 0.30%0.20%

0%

10%

20%

30%

40%

50%

Annual consumption Distribution (kWh)

Segment Population

1.4%

2.8%

0.0%

1.0%

2.0%

3.0%

Vacancy Rate

Segment Population

31%

51%

11%6%

60%

21%

12% 7%

0%

20%

40%

60%

80%

LM VI SI N


Segment Population

16%

35%

49%

23%

41%37%

0%

10%

20%

30%

40%

50%

60%

<2 2-10 >10

Years


Segment Population

Electrically Heated House/Duplex Customers

15%

40%45%

23%

39% 38%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%



Segment Population

Monthly Bill

Median: $146

($85 - $231)

Monthly kWh

Median: 1,204

(751 - 1,806)

Segment Size

~280k customers

16% of population

7%

50%

43%

Step 1 vs. Step 2

Never in Step 2

Sometimes in Step 2

Always in Step 2

3.7%2.8%

0.0%

1.0%

2.0%

3.0%

4.0%

Vacancy Rate

Segment Population

58% 31%

8% 2% 0% 0% 0% 0%

25%

30%

21%18%

5% 1% 0.30% 0.20%

0%

20%

40%

60%

80%

Annual Consumption Distribution (kWh)

Segment Population

35%

45%

20%23%

41%

37%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

<2 2-10 10+

Years


Segment Population

77%

15%5% 3%

60%

21%12% 7%

0%

20%

40%

60%

80%

100%

LM VI SI N


Segment Population

67%

43%

33%

57%

0%10%20%30%40%50%60%70%80%90%

100%

Space Heating

Electric Non-Electric

48%

21%

52%

79%

0%

20%

40%

60%

80%

100%


Renter Owner

46%

40%

15%

23%

39%38%

0%5%

10%15%20%25%30%35%40%45%50%



Segment Population

Apartment Customers

Monthly Bill

Median: $34

($21 - $57)

Monthly kWh

Median: 290

(157 – 555)

Segment Size

~541k customers

30% of population

70%

29%

1%

Step 1 vs. Step 2

Never in Step 2

Sometimes in Step 2

Always in Step 2

Low Income Customers

65%

15% 11%9%

60%

21%12% 7%

0%

20%

40%

60%

80%

LM VI SI N


Segment Population

40%21%

60%79%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Segment Population


Renter Owner

37%

45%

12%

6%

55%

30%

10%5%

0%

10%

20%

30%

40%

50%

60%

House/Duplex Apartment Row House Mfd.Home/other

Housing Type Distribution

Segment Population

35%

27%

38%

23%

39% 38%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%



Segment Population

31% 30%

17% 18%

4%1% 0% 0%

25%

30%

21%18%

5% 1% 0.30% 0.20%

0%

10%

20%

30%

40%

Distribution by annual consumption (kWh)

Segment Population

Monthly Bill

Median: $55

($28 - $126)

Monthly kWh

Median: 538

(238 – 1,032)

Segment Size

~173k customers

10% of population

50% 43%

50% 57%

0%

20%

40%

60%

80%

100%

Segment Population

Space Heating


High Consuming Customers (>=30,000kWh/year)

46%

31%

15%8%

60%

21%12% 7%

0%

20%

40%

60%

80%

LM VI SI N


Segment Population

12%

42%45%

23%

41%37%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

<2 2-10 >10


Segment Population

65%

43%

35%

57%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Segment Population

Space Heating

Electric

Non-Electric

91%

0%0%

8%

55%

30%

10% 5%

0%

20%

40%

60%

80%

100%


Segment Population

Monthly Bill

Median: $410

($350 - $619)

1.3%

0.30%0.20%

0.0%

0.4%

0.8%

1.2%

Annual consumption (kWh)

Monthly kWh

Median: 3,071

(2,648 – 4,550)

Segment Size

~32k customers

1.8% of population

0%

6%

94%

Step 1 vs. Step 2

Never in Step 2

Sometimes in Step 2

Always in Step 2

0

10,000

20,000

30,000

40,000

Nu

mb

er o

f C

ust

om

ers

Customers by Type

71%

13% 13%3%

53%

13%29%

5%

0%

20%

40%

60%

80%


Segment Population

67%

22%

8%3%

59%

21%

12% 8%

0%

20%

40%

60%

80%

LM VI SI N


Segment Population

Electric Vehicle Household Customers

7% 20%

93% 80%

0%

20%

40%

60%

80%

100%

Segment Population


Renter Owner

7%

34%

59%

23%

39% 38%

0%

10%

20%

30%

40%

50%

60%

70%



Segment Population

27%43%

73%57%

0%

20%

40%

60%

80%

100%

Segment Population

Space Heating


Feedback form question #2: What other groups or

segments should we look at and why?

Rate design conceptsRob Zeni

Senior Regulatory Specialist

We could redesign the default residential rate and introduce voluntary rates

49

Illustrative default rate design concepts:

▪ Maintain the inclining block rate

▪ Eliminate the inclining block rate

▪ Segment the residential rate class

Illustrative voluntary rate design concepts:

▪ Introduce voluntary whole home time varying rate

▪ Introduce voluntary end-use rates, such as electric vehicle

charging and heat-pump rates

Rate Design Concepts

We’re seeking feedback on the following default rate design concepts

Preliminary Default Rate Design Concepts

50

Default Rate Concepts Description

Maintain the inclining block rate Rate concepts may include:

• Status quo

• Increase of Step1 / Step 2 threshold

• Reduced energy charges and increase the basic charge

Eliminate the inclining block rate Rate concepts may include:

• Flat rate and maintain basic charge

• Flat rate with increased basic charge

• Declining block rate

Residential rates by segment Rate concepts may include:

• Different flat rates based on annual consumption

Forecast Revenue Neutrality is maintained in all pricing scenarios.

This refers to calculating the energy rates and basic charges so that the target revenue from the residential rate class is

achieved, resulting in no impact to other rate classes.

Concepts that Maintain the Inclining Block Rate Structure

51

Illustrative pricing

Default Rate Concepts

Threshold

(kWh per

month)

Step 1 Rate

(¢ / kwh)

Step 2 Rate

(¢ / kwh)

Step 3 Surcharge

Rate

(¢ / kwh)

Basic Charge

(¢ / day)

Status quo 675 9.41 14.10 N/A 20.80

Increase of Step1 / Step 2

threshold900 10 14.5 N/A 20.80

Reduced energy charges and

increased the basic charge675 8.5 11.5 N/A 63

52

▪ Depending on the design, a continuation of the inclining block rate

design may:

• Continue to encourage energy conservation

• Minimize bill impacts of rate redesign

• Discourage electrification

Maintaining the Inclining Block Rate:

Considerations

Feedback form question #3: Do you support BC Hydro advancing rate

design concepts that maintain the inclining block rate for further

development? Are there additional options related to the inclining block rate

you would like to see analyzed?

Concepts that Eliminate the Inclining Block Rate Structure

53

Illustrative pricing


Threshold

(kWh per

month)

Step 1 Rate

(¢ / kwh)

Step 2 Rate

(¢ / kwh)

Basic Charge

(¢ / day)

Status Quo 675 9.41 14.10 20.80


Flat Rate

(¢ / kwh)

Basic Charge

(¢ / day)

Flat rate and no change to basic charge 11.5 20.80

Flat rate and triple basic charge 10 63


Threshold

(kWh per

month)

Step 1 Rate

(¢ / kwh)

Step 2 Rate

(¢ / kwh)

Step 3 Rate

(¢ / kwh)

Basic Charge

(¢ / day)

Declining Block Rate 675 / 2500 12 10 9 20.80

54

▪ Depending on the design, eliminating the inclining block design may:

• Improve bill and revenue stability by reducing high winter heating bills

• Improve affordability of electric heat

• Support decarbonization by removing a disincentive to electrify

• Improve economic efficiency by moving the energy charge closer to

marginal costs

• Increase bills for some customers

Eliminate the Inclining Block Rate:

Considerations

Feedback form question #4: Are you interested in BC Hydro further developing rate

design concepts that eliminate the inclining block rate? Are there additional options for

eliminating the inclining block rate you would like to see analyzed?

Concepts that Segment the Residential Class

55

Illustrative Pricing


Threshold

(kWh per

month)

Step 1 Rate

(¢ / kwh)

Step 2 Rate

(¢ / kwh)

Basic Charge

(¢ / day)

Status Quo 675 9.41 14.10 20.80


Flat Rate

(¢ / kwh)

Basic Charge

(¢ / day)

Flat rate for Customers < 8,000 kWh per year 9.5 20.80

Flat rate for Customers 8,000 to 20,000 kWh per year 11.5 20.80

Flat rate for Customers > 20,000 kWh per year 12.5 20.80

56

▪ Depending on the design, segmenting the rate class may:

• Improve flexibility by allowing for greater service differentiation across

the rate class bill

• Improve affordability for lower usage accounts

• Be considered unfair to customers in segments that that have a higher

rate

Segment the rate class: Considerations

Feedback form question #5: Are you interested in BC Hydro further

developing rate design concepts that segment the rate class? Are there

additional options for segmenting the rate class you would like to see

analyzed?

We’re seeking feedback on the following voluntary rate design concepts

Preliminary Voluntary Rate Design Concepts

57

Voluntary Rate Concepts Description

Whole-home time varying rates Rate concepts may include:

• Seasonal time varying rates

• Weekday / weekend time varying rates

• Traditional (peak, off-peak, super off-peak) time varying rates or simple

day / night rates

• Critical peak period pricing

End-use rates, such as electric vehicle

charging and heat-pump rates

Rate concepts may include:

• Seasonal time varying rates

• Weekday / weekend time varying rates

• Traditional (peak, off-peak, super off-peak) time varying rates or simple

day / night rates

• Discounted rate based on end use

Voluntary Whole Home Time Varying Rate

58

Traditional time varying rate with peak, off-peak and super off-peak illustrative pricing

11 pm7 am

22 ¢ / kWh

10 ¢ / kWh

Basic Charge 20 ¢ / day 4 pm 9 pm

5 ¢ / kWh

59

▪ Depending on the design, voluntary time varying rates may:

• Improve flexibility by allowing for greater service differentiation across the rate class

• Improve affordability by reducing bills for customers who can shift when they use

electricity

• Improve economic efficiency by sending a price signal to shift demand from peak

periods to minimize required transmission and distribution investments

• Reduce utility revenue, which can be offset by utility savings on transmission and

distribution

Voluntary time varying rates:

Considerations


developing rate design concepts for time varying rates? Are there additional

options for time varying rates you would like to see analyzed?

Voluntary End Use Time Varying Rate

60

Overnight

Normal

7 am 11 pm

15 ¢ / kWh

9 ¢ / kWh

Basic Charge 20 ¢ / day

Simple Overnight Rate for end uses such as electric vehicle charging

61

Voluntary end use rates:

considerations

▪ Depending on the design, voluntary end use rates may:

• Improve economic efficiency by sending a price signal to reduce peak demand

and minimize required transmission and distribution investments

• Support decarbonization by encouraging electric vehicle adoption and heat

pump adoption

• Be perceived as unfair by customers who cannot participate as they do not

have the end use technology


developing end use rates? Are there additional options for end use rates

you would like to see analyzed?

62

Other considerations

Feedback form question #8: Are there any other rate design concepts

we didn’t mention today that you would like us to explore?

Feedback form question #9: Are there any rate concepts that you feel

may require program support (marketing and outreach, educational

materials, financial incentives, technology incentives) in order to be

effective?

Closing remarksChris Sandve

Chief Regulatory Officer

Phase I

(April-May)

Concepts

Phase II

(Aug-Sept)

Options

Phase III

(Nov-Dec)

Proposal

Engagement Plan for Rate Design

- Online survey

- Stakeholder session (May 19)

- Telephone townhalls


- Explore rate options

- Measure support


- Finalize rate proposals


Invite you into the process

Keep you engaged

Demonstrate we listened

64

We’d love to hear more from you.

▪ Complete the online Feedback Form this week

▪ Join us for additional engagement

▪ BC Hydro values your participation and feedback on our rate

designs

▪ Please contact BC Hydro Regulatory Group with any questions

about the regulatory or engagement process:

[email protected]

▪ Remember to submit your feedback by June 02, 2021

▪ The link to the online feedback form is:

https://bchydro.ca1.qualtrics.com/jfe/form/SV_8kqmM9K9t03OeLc

Closing Remarks:

Key Contacts and Process

66


https://bchydro.ca1.qualtrics.com/jfe/form/SV_8kqmM9K9t03OeLc

Documents

residential-rate-design-presentation-20210519.pdf - BC Hydro